Lender-placed Insurance

Frequently Asked Questions: Lender-placed Insurance

Insurance coverage is a vital piece of the mortgage process, as both the homebuyer and the mortgage lender want their investments in the property protected. 

That’s why the standard mortgage includes a requirement that buyers maintain adequate, continuous insurance on their home, for the life of the loan.  If they do not, lenders may procure a backup policy on the property, known as lender-placed insurance, to ensure continuous coverage and protect the interests of both the bank and the homeowner in the event of a mishap such as a fire.

Assurant, with more than a century of experience in property, health and other insurance, is the nation's leader in lender-placed insurance.  Here are answers to some common questions about this type of coverage:

How does lender-placed insurance work?

Don’t these policies just protect the banks?

How long has lender-placed insurance been around?

Is lender-placed insurance the same as “force-placed” insurance?

Aren’t lender-placed policies expensive?

Are these policies forced on homeowners who have no idea they have them?

Why do banks get a commission on lender-placed insurance?

How common are lender-placed policies?

Who regulates lender-placed insurance?

Aren’t some of these policies placed in error?

Does lender-placed insurance cover belongings?

How can homeowners avoid lender-placed insurance?